Semiconductor Latest News: TSMC Plans German Fab, U.S Terms Chinese Ban On Micron Chips 'Economic Coercion', Chip Equipment Firms Rush To Korea

1."It is economic coercion" U.S. won't tolerate China's ban on Micron chips, Commerce Secretary Gina Raimondo.

The United States "won't tolerate" China's recent move to impose a ban on purchases of memory chips made by Micron Technology from its key infrastructure projects and is working closely with allies to address such "economic coercion," U.S. Commerce Secretary Gina Raimondo has said.

"We see it as, plain and simple, economic coercion," said Raimondo of the blacklisting as a ministerial meeting of the Indo-Pacific Economic Framework (IPEF) ended in Detroit, Michigan.

"We won't tolerate it, nor do we think it will be successful." she added.

The U.S. was "closely engaging with partners addressing this specific challenge and all challenges related to China's non-market practices", she further said.

On May 21, China's cyberspace regulator announced that products made by leading U.S. memory chipmaker Micron Technology posed "serious network security risks" and would be banned for sale to China's key information infrastructure operators.

The move was viewed as a retaliatory measure by China over Washington, targeting the Chinese semiconductor industry by introducing export controls and related restrictions. Washington has imposed crippling export controls on chipmaking technology to China, effectively depriving Micron rival Yangtze Memory Technologies of buying specific American components.

"The review found that Micron's products have serious network security risks, which pose significant security risks to China's critical information infrastructure supply chain, affecting China's national security," the Cyberspace Administration of China (CAC) said in a statement.

"Companies and platforms are welcome to introduce products and services into Chinese market as long as they conform to the requirements of Chinese laws and regulations," the statement added.

The ban will effectively stop Chinese customers in critical industries ranging from energy to finance to stop purchasing Micron products and services.

Earlier this year, Beijing said that it is carrying out a detailed review to ensure supply chain security for China's critical information infrastructure operators (CIIOs) and to ward off cybersecurity risks,

In 2022, China accounted for more than 10 per cent of Micron's $30.8 billion revenue.

Micron is among a handful of semiconductor manufacturers capable of producing DRAM (Dynamic random access memory, a specific type of RAM chip). It holds a 23% global market share. Samsung is the dominant player with a 41.7% share, followed by S.K. Hynix Inc. (30%).

Micron also holds around 12% market share in NAND flash memory technologies.

2.TSMC is looking to set up a fab in Germany

Taiwan Semiconductor Manufacturing Co(TSMC), the world's biggest contract chipmaker, is negotiating with the German government to build a new semiconductor plant there.

The Taiwanese chipmaker may receive subsidies for as much as 50 per cent of the costs of establishing the fab. If the reported quantum of subsidy is accurate, Germany's incentives will be more than what most other chipmakers are getting for their plants in Europe.(40 per cent maximum)

A German Ministry for Economic Affairs and Climate Action spokesperson confirmed that talks with TSMC were ongoing but did not provide details.

TSMC is partnering with Bosch Ltd, NXP Semiconductors NV and Infineon Technologies AG for this project.

The proposed semiconductor manufacturing plan at Dresden could cost as much as 10 billion euros (US$10.7 billion).

3.Global semiconductor equipment companies are rushing to build plants and research and development facilities in Korea. 

Global semiconductor equipment companies are accelerating their plans to build plants and research and development facilities in South Korea in order to reduce China risk while strengthening partnerships with Samsung Electronics and S.K. Hynix.

In March this year, South Korea unveiled an ambitious plan to build the world's largest high-tech semiconductor chip cluster in Yongin, Gyeonggi Province, by investing $230 billion to achieve a competitive edge in the sector.

The semiconductor mega cluster is part of the government's grand plan to promote six key industries (chips, displays, secondary batteries, bio, future vehicles and robots) by attracting up to $230 billion.

Samsung and S.K. Hynix, the second-and fourth-largest semiconductor companies in the world, have major plants in Gyeonggi,

Top semiconductor manufacturing equipment majors like U.S.-based Applied Materials, Dutch-based ASML, KLA, and Lam Research plan to make big investments in Gyeongg province.

ASML, which dominates the production of Extreme Ultraviolet (EUV) lithography equipment, is investing in a 16,000-square-meter site in Dongtan to establish a new campus with a re-manufacturing facility for EUV-related components and a training centre.

Applied Materials, the global leader in front-end equipment, is looking to establish a new research and development centre.

Japanese equipment companies are also expanding their investments in Korea. Tokyo Electron (TEL) recently invested $150.8 million to expand its existing R&D facilities. TEL is the world leader in track equipment, which is essential for lithography.

4.China Slams Japan's semiconductor technology export controls

Beijing said strongly criticised Japan's latest chipmaking equipment export restrictions to China.

On May 23, the Japanese government announced that it would add 23 items, including advanced semiconductor manufacturing equipment, to its list of regulated exports. The newly added items include manufacturing equipment for extreme ultraviolet lithography and etching equipment for stacking memory devices in three dimensions. The curbs are set to take effect on July 23.

Japan's action represents "an abuse" of export control measures and "a serious deviation" from free trade and international rules, the Chinese Ministry of Commerce said in a statement.

The action would "severely damage the interests of Chinese and Japanese companies and the economic and trade cooperation between the two countries, disrupt the global semiconductor industry landscape, and impact supply chain security and stability", it said.

Beijing's ambitions to shore up domestic semiconductor manufacturing have been hit by export controls imposed by U.S., Netherlands and now China.

5. Chip wars with China risk ‘enormous damage’ to US tech, says Nvidia chief Jensen Huang, tells lawmakers to be ‘thoughtful’ about imposing more export controls on Beijing

Nvidia’s founder and CEO Jensen Huang Jen-hsun as termed China a “very important” market for the technology industry.

Nvidia Corp is the cusp of a US$1 trillion market capitalization as demand for his company’s specialised chips explodes amid a frenzy over artificial intelligence (AI).

Speaking to Financial Times, Huang said that the Biden administration’s export controls that bar the company from selling its most advanced chips to one of its biggest markets is like having “our hands tied behind our back”.

The US government ban on Nvidia's most advanced graphic processing units (GPUs) has impacted about a quarter of its revenues, forcing the company to tailor-make alternative, lower-end versions for Chinese clients to comply with the export rules.

Two of its premium AI computing chips, the A100 and H100, were affected by the ban, so the company introduced modified versions -- dubbed A800 and H800 -- for sale to China.